Thailand registered 76,314 EVs in 2023, almost seven times as much as the
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The factory is the Chinese automaker’s first in Southeast Asia, where it already dominates the fast-growing market for electric vehicles.
A BYD Dolphin EV on display at the 40th Thailand International Motor Expo in Bangkok, Thailand, November 29, 2023.
Chinese automaker BYD yesterday opened an electric vehicle plant in Thailand, its first factory in Southeast Asia, marking the latest move by Chinese automakers to expand their footprint in the fast-growing regional EV market.
The $486 million factory in Rayong, south of Bangkok, will employ around 10,000 workers and have an annual production capacity of 150,000 vehicles per year, the Associated Press reported. During the opening ceremony, Wang Chuanfu, the CEO and president of BYD, presented a BYD Dolphin to a charitable foundation linked to the Thai royal family.
“Thailand has a clear EV vision and is entering a new era of auto manufacturing,” Wang said during the ceremony. “We will bring technology from China to Thailand.” To mark the occasion, BYD has also offered customers hefty discounts on its Dolphin and Atto 3 SUV models.
The factory reflects BYD''s focus on Southeast Asia, a region where EV sales more than doubled in the first quarter of 2024 from a year before, according to figures from Counterpoint Research. Of these, BYD was by far the leading EV brand, accounting for 47 percent of sales during this period, followed by Vietnam''s VinFast.
The BYD plant, which broke ground in March of last year, is part of a wave of investment from Chinese EV makers in Thailand, which Reuters puts at more than $1.44 billion. Among the other Chinese companies setting up factories in the country are Hozon New Energy Automobile, Changan Automobile, Great Wall Motor, and SAIC Motor, among others.
So far, most of these incentivized have been taken up by Chinese firms, who have now established a considerable lead over the Japanese firms that have traditionally dominated Thailand''s auto manufacturing sector. According to Counterpoint Research, three-quarters of EV sales in Q1 were made by Chinese firms, while sales of internal combustion engine cars, a market traditionally dominated by Japanese and Korean firms, declined by 7 percent.
BYD, which is currently vying with Tesla for the status of the world''s largest EV manufacturer, was an early market entrant in Southeast Asia and has gained market share on the back of a canny strategy of working with dominant local firms. As Reuters reported last September, the firm''s success "is based on a pattern of distribution partnerships with large, local conglomerates that have allowed the carmaker to expand reach, test consumer preferences, and navigate complex government regulations in the region."
Even as BYD and its Chinese counterparts pull ahead, the competition between EV manufacturers is heating up, as is the competition between Southeast Asian nations to attract foreign investment in EV and EV-adjacent industries. The opening of the BYD plant came a day after Indonesian President Joko "Jokowi" Widodo presided over the opening of the country''s first electric battery plant.
The $1.1 billion factory in Karawang, West Java province, was developed as a joint venture between South Korean battery producer LG Energy Solution (LGES) and carmaker Hyundai, which will also operate the facility. The plant has the capacity to produce 10 gigawatt-hours of battery cells each year, enough to power 150,000 electric cars. The batteries will be shipped to Hyundai’s manufacturing plant in nearby Bekasi to power various Hyundai and Kia vehicles, including Hyundai''s Kona Electric, which the firm plans to launch in Indonesia later this month, the Korea JoongAng Daily reported.
The factory marks an important milestone in the country’s efforts to build a complete EV manufacturing ecosystem around its rich deposits of nickel and other crucial minerals. “This is the first and largest EV battery cell plant in Southeast Asia, and I am sure we will be able to win this competition with other countries because the nickel, bauxite, and copper are here,” Jokowi said at the launch ceremony.
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Sebastian Strangio is Southeast Asia editor at The Diplomat.
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Chinese automakers have succeeded in the Thai market by adopting comprehensive localization strategies.
A showroom for electric vehicles from the Chinese automotive company BYD in Phuket, Thailand.
China''s electric vehicles (EVs) have made serious inroads in Southeast Asia in recent years. Around 75 percent of the region''s EV market is made up of Chinese vehicles. The sales of China''s Wuling Air EV increased by 65.2 percent in 2023, becoming the second most purchased EV brand in Indonesia. Last year, China''s BYD remained the best-selling EV brand in Singapore. So far, however, China''s EV companies have had their greatest successes in Thailand, which accounts for the majority of EV sales in Southeast Asia.
Last year, Chinese automakers acquired a market share of around 80 percent of the country''s EV market. Moreover, the three most popular EV brands of the year in Thailand are all from China, namely BYD, Neta, and MG. In addition to the affordable price and many other selling points, such as cutting-edge technology, comfort and safety, innovative features, and efficient design and construction, two factors are key to the success of Chinese EV makers in Thailand.
Foremost, this success should be attributable to the localization efforts of Chinese EV manufacturers in Thailand, which have worked hard to form partnerships with established local companies. For instance, BYD cooperates with Rever Automotive, designating the company as the exclusive dealer of its cars in Thailand. Rever Automotive is backed by Thailand''s well-known Siam Motors Group, which has been called "Thailand''s automotive king." Similarly, SAIC Motor has partnered with Charoen Pokphand Group (CP), Thailand’s largest private company and the largest privately held Royal Warrant holder of the Thai Royal Family, to market its MG brand EVs in the country.
By cooperating with local conglomerates, Chinese EV makers can make full use of local companies'' mature retail networks. In addition, they can also tap local professionals to design the marketing strategy that best fits Thailand''s conditions. Great Wall Motor (GWM) is a strategic partner of various Thai agencies and organizations, including the Tourism Authority of Thailand and the Electricity Generating Authority of Thailand. GWM has used these partnerships to promote its "GWM Initiative,” a way of demonstrating its commitment to social development, cultural diversity, and community building and development in Thailand.
The second key factor is that there is a broad political consensus in Thailand about the country''s EV ambition, and both the government and opposition parties have generally applauded the entry of China''s EV companies. GWM made its debut in the country in 2021 with the support of then-Prime Minister Prayut Chan-o-cha. Unlike China''s COVID-19 vaccines, which have prompted criticism from opposition parties and political polarization in the country, Prayut''s EV strategy and his welcoming attitude towards Chinese EVs have never been caught in the crossfire of any anti-government protests.
In October, during his first trip to China after assuming power, Srettha stated that his administration was looking to enhance EV supply chain cooperation with China. The same month, Srettha test-drove BYD’s Seal electric sedan. Then, in November, Srettha chose to visit SAIC Motor''s production base in Chonburi province. During the visit, he tried the company''s MG Cyberster sports car. With his words and deeds, the new Thai leader has unequivocally endorsed Chinese-made EVs.
It is quite intuitive that the degree of localization determines whether a foreign company will successfully enter a foreign market. For instance, research shows that Chinese telecom firms have successfully convinced the Indonesian government and the public that they are trusted cybersecurity providers in the country by effectively adopting localization strategies. Being able to localize the business is instrumental not only to optimizing the use of resources but also to best meet the needs of the local demands of hosting countries.
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